The global economy is still navigating a tricky phase, according to the International Monetary Fund.
As a result, banks and financial institutions are actively seeking ways to cut down on operational costs while driving more financial activity.
In this context, Form3, a startup focused on streamlining financial transactions by connecting various financial players, has successfully raised $60 million to further expand its operations.
This funding round, led by British Patient Capital, completes Form3’s Series C funding with a total of $220 million.
The round saw participation from key strategic and financial investors, including Visa, Goldman Sachs, MasterCard, Barclays, Molten Ventures, and 83North.
According to sources close to TechCrunch, the startup’s post-money valuation stands around $570 million.
A Different Approach to Fintech
Unlike many fintech startups that enter the market with a disruptive mindset, Form3 has a unique approach.
The company’s story began in 2016, when co-founders Mike Walters and Michael Mueller, both former Barclays employees, grew frustrated with the inefficiencies in developing new services.
Walters shared with TechCrunch that every attempt to improve their business often hit a roadblock due to the outdated payment infrastructure.
“We realized that modern technology could solve these problems, but we wouldn’t just replicate existing solutions,” Walters humorously noted.
Neither Walters nor Mueller came from a technical background; instead, they excelled in strategic and product management.
To bridge the technical gap, they partnered with Steve Cook, a SaaS expert for financial transactions, who joined Form3 as a co-founder and CTO.
Growing Influence in Fintech
Form3 has quietly become a significant player in the fintech industry.
It collaborates with major investors and a variety of neobanks like Klarna, N26, and Sumup, as well as banking-as-a-service providers such as Thought Machine.
These clients use Form3’s APIs to offer more efficient payment services.
The startup provides a range of services, including instant transfers, payment orchestration, fraud protection, direct debit, and credit transfers. In the U.K., Form3 handles over 50% of the country’s non-cash payment volume.
While Walters did not disclose specific revenue figures, he mentioned that the company has doubled its global processing volume in the past six to nine months and expects to achieve the same growth rate in the coming year.
Expanding Horizons
The U.S. market is Form3’s latest focus, with plans to boost volume through expansion into new regions like the U.S. and Europe.
This funding round was a long time in the making, with the first investment in Series C occurring back in September 2021.
The current tight market conditions have made it challenging to secure large growth rounds, making smaller extensions more feasible.
This approach also attracts significant backers without the need for a massive cash influx.
Tom Haywood, managing director of direct investments at British Patient Capital, expressed enthusiasm about the investment: “Form3 has developed a leading solution for a global challenge: transitioning to modern, future-proof payment infrastructure.
We’re thrilled to support their continued growth.”
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